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Home My WebLink About20210536 Ver 1_Draft MBI_Tobacco Road_Final_20221219 AGREEMENT TO ESTABLISH THE RES TOBACCO ROAD MITIGATION BANKING INSTRUMENT IN THE HAW RIVER SUBWATERSHED FOR NUTRIENT OFFSET AND RIPARIAN BUFFER MITIGATION CREDITS PURSUANT TO THE JORDAN LAKE NUTRIENT MANAGEMENT STRATEGY TABLE OF CONTENTS I.PREAMBLE....................................................................................................................... 2 II. LOCATION AND GEOGRAPHIC SERVICE AREA ...................................................... 2 III. AUTHORITIES .................................................................................................................. 3 IV. ESTABLISHMENT OF BANK PARCEL ......................................................................... 3 V. PRE-CONSTRUCTION DOCUMENTATION ................................................................. 5 VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL ................ 7 VII.CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL ............... 10 VIII. CREDIT RELEASE SCHEDULE .................................................................................... 13 IX. PROCEDURE FOR DEBITING AND CREDITING ...................................................... 13 X. BANK PARCEL CLOSURE ............................................................................................ 15 XI. GENERAL PROVISIONS FOR THE BANK PARCEL ................................................. 16 ATTACHMENTS A – Division of Water Resources Authority Document B – Delivered Credit Yield Table for Jordan Subwatersheds dated December 20, 2012 C – Ledger Templates References 1. Nutrient Offset Credit Trading Rule: %20environmental%20management/subchapter%20b/15a%20ncac%2002b%20.0703.pdf 2. Riparian Buffer Mitigation Rule: http://reports.oah.state.nc.us/ncac/title%2015a%20-ity/chapter%2002%20- %20environmental%20management/subchapter%20b/15a%20ncac%2002b%20.0295.pdf 3. NC Session Law 2019-86 “Nutrient Offset Credits”: https://www.ncleg.gov/Sessions/2019/Bills/House/PDF/H812v3.pdf 4. Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits (November 2019): ssues--- Resolutions-Ver-1.0-buffer-mitigation-nutrient-offset.pdf 5. NCDWR – Methodology and Calculations for Nutrient Reduction on the Bank Parcel: -Buffer- Credit.pdf 1 I.PREAMBLE This RES Tobacco Road Mitigation Banking Instrument (“Instrument”) regarding the establishment, use, operation, and maintenance of the Tobacco Road Nutrient Offset and Buffer Mitigation Bank Parcel (“Bank Parcel”),to provide Jordan Lake Watershed Riparian Buffer mitigation credits (“Riparian Buffer Credits”) and Jordan Lake Nutrient Strategy nutrient load reduction credit (“Nutrient Offset Credits”) is made and entered into by and among Environmental Banc and Exchange, LLC (“EBX, LLC”) acting as the Bank Sponsor (“Sponsor”), and the North Carolina Department of Environment – Division of Water Resources (“DWR”). This Instrument is in accordance with the 15A NCAC 02B .0703 and Consolidated Mitigation Rule 15A NCAC 02B .0295, which became effective on November 1, 2015, see Attachments and References. The purpose of this Bank is: A. To restore and preserve riparian vegetation adjacent to mitigated streams with the intent to improve Haw River Subwatershed of the Jordan Lake Watershed. B. To convert agricultural land uses within riparian areas adjacent to mitigated streams into a dense and diverse, hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices practices into streams. C. To provide buffer mitigation and nutrient offsets sell any resulting Riparian Buffer Credits and/or Nutrient Offset Credits to third parties in the Haw River Subwatershed of the Jordan Lake Watershed, for development (both existing and proposed) or to offset NPDES-permitted wastewater nutrient sources or offset. II. LOCATION AND GEOGRAPHIC SERVICE AREA A. The Geographic Service Area (“GSA”) is the designated area wherein a Bank can reasonably be expected to sell Riparian Buffer Credits and/or Nutrient Offset Credits for impacts due to development activities. B. The GSA for this instrument is limited to the Haw River Subwatershed of Jordan Lake watershed as defined in rule 15A NCAC 02B .0262. C. Sale or transfer of Riparian Buffer Credits shall be limited to Haw River Subwatershed of the Jordan Lake Watershed, as defined in rule 15A NCAC 02B .0262, unless otherwise authorized by the DWR or delegated local government in accordance with 15A NCAC 02B .0295. D. Sale or transfer of delivered Nutrient Offset Credits shall also be limited to Haw River Subwatershed of the Jordan Lake watershed, as defined in rule 15A NCAC 02B .0262 and in accordance with 15A NCAC 02B .0703, unless otherwise authorized by the DWR in accordance with Session Law (S. L.) 2019-86. E. The following table provides site-specific details of the Bank Parcel proposed under this Instrument, which is within the Haw River Subwatershed of the Jordan Lake Watershed (8-digit HUC 03030002); 2 Table 1.0 – Site-specific Details Bank Parcel County 14-Digit USGS DWR Project # Project Named Receiving Primary Land Name HUC Location Stream Use/s Tobacco Road Alamance03030002050040 Not Assigned 35.973063, Motes Creek Combination of -79.282234 forested and non- forested areas used for livestock and row crop agriculture III. AUTHORITIES A. The Bank Parcel will be used to provide Riparian Buffer Credit and/or Nutrient Offset Credit in accordance with the in the DWR Authority document referenced herein as “Attachment A” and attached to this Instrument. B. reAttachment A and any new approved North Carolina (“State”) statutes and rules for the Jordan Lake Nutrient Sensitive Waters Management Strategy. C. The selling of credits generated from the Bank Parcel approved under this Instrument, shall be consistent with approved State statutes and rules for the Jordan Lake Nutrient Sensitive Waters Management Strategy. D. Mitigation activities proposed under this Instrument and corresponding Buffer Mitigation Plan (Plan) to generate Riparian Buffer Credits and Nutrient Offset Credits shall be consistent with State statutes and rules for the Jordan Lake Nutrient Sensitive Waters Management Strategy that are in place at the time a complete Plan is submitted to DWR. IV. ESTABLISHMENT OF BANK PARCEL 3 A. In accordance with 15A NCAC 02B .0295 and 15A NCAC 02B .0703, DWR has provided a “Site Viability Letter” for the Bank Parcel proposed under this Instrument. The site viability letter is not an approval of the site to generate Riparian Buffer Credits and Nutrient Offset Credits, but is a preliminary review of the Bank Parcel that details and confirms existing land-use conditions, defines the riparian sites (Enhancement, Preservation, or Restoration), and identifies features (streams, ditches, ponds, etc.) that meet general criteria to be suitable to generate Riparian Buffer Credits and Nutrient Offset Credits. Table 2.0 below outlines when a Site Viability Letter was issued by DWR for the mitigation site proposed under this Instrument: Table 2.0 – Site Viability Letter Details Viability Letter Viability Letter Bank Parcel NC DWR Site Visit Expiration Date Received Tobacco Road August 11, 2021 September 24, 2021 Setptember 24, 2023 B. the Plan. Site Viability Letters will either expire on the dates listed in the table above or upon the submittal of an individual As-Built Report to the DWR, whichever comes first. If theSite Viability Letter expires prior to submittal of a complete Plan as described in Section V to DWR, then the Sponsor must submit a formal Parcel. C. The Bank Parcel proposed for inclusion under this Instrument Plan be submitted to, and approved by, the DWR prior to use of the individual Bank Parcel for mitigation purposes or for any sale or transfer of any associated credits. The contents of the Plan are provided in Section V. D. This Bank Parcel is slated to be developed in conjunction with the RES Cape Fear Umbrella Mitigation Bank, and the Tobacco Road Mitigation Site, United States Army Corps of Engineers (USACE) Action ID # SAW-2021-00489, for stream mitigation. The Stream Mitigation Plan associated with this Bank Parcel has been submitted to the Interagency Review Team (IRT) for review and approval. E. The Plan submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. F. Most of the Riparian Buffer Credits on this Bank Parcel will be generated along stream channels that are proposed for stream mitigation. Stream Mitigation Plans will be submitted under the RES Cape Fear Umbrella Mitigation Bank referenced in “D” in this section. Additionally, all activities conducted within riparian buffers and adjacent riparian areas for purposes of generating Riparian Buffer Credits or Nutrient Offset Credits will be conducted in concurrence with stream mitigation activities. Riparian Buffer Credit may be achieved through restoration, enhancement and preservation of DWR riparian buffers as they are defined in 15A NCAC 02B .0267, and other riparian areas allowed per 15A NCAC 02B .0295 (n) and (o) on the Bank Parcel. Riparian Buffer Credits are only attainable if the width of the mitigated area is at least 20 feet as measured perpendicularly from top of bank. The viability of features to generate riparian buffer credits is 4 provided in the Site Viability Letters for the Bank Parcels and referenced in Table 2.0 of this Instrument. G. The Bank Parcel is intended to provide Jordan Lake Riparian Buffer Credit as follows: 1. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to mitigated streams. 2. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295(b) by placing a conservation easement around riparian areas adjacent to mitigated streams as allowed by 15A NCAC 02B .0295 (o). 3. Diffused flow will be maintained onsite to the maximum extent practicable. 4. maintenance of diffuse flow onsite is unattainable H. Nutrient Offset Credit may be achieved on this Bank Parcel through restoration of the riparian areas adjacent to viable streams, where agriculture was determined by DWR to be the predominant land use. Nutrient Offset Credits are only attainable if the width of the restored riparian areas are at least fifty (50) feet as measured perpendicular from tops of banks along viable streams. The width of the restoration area begins at the most landward limit of the top of bank or the rooted herbaceous vegetation and extends landward a minimum of 50 feet and a maximum of 200 feet on all sides of the surface waters. The viability of features to generate nutrient offset credits is provided in the Site Viability Letters for the Bank Parcels and referenced in Table 2.0 of this Instrument. I. The Bank Parcel is expected to provide Nutrient Offset Credits in accordance with 15A NCAC 02B .0703 as follows: 1. Converting agricultural land uses within riparian areas to a diverse forest by placing a perpetual conservation easement around riparian areas along viable streams and viable ditches in accordance with 15A NCAC 02B .0703 (g). 2. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to viable streams where agriculture has been determined by DWR to be the predominant land-use. J. The Bank Parcel submitted for review under this Instrument is anticipated to begin stream mitigation construction in Spring 2024. The total area of riparian restoration activities on the Tobacco Road Bank Parcel is expected to be 43.01 acres. V. PRE-CONSTRUCTION DOCUMENTATION Buffer Mitigation Plan A. The Plan submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the Bank Parcel. The Plan must describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the Plan is submitted to DWR. The Plan shall include detailed information consistent with the sections 5 below concerning; 1) site location (14-; 2) existing conditions with current photos; 3) proposed buffer mitigation and nutrient offset activities including a detailed vegetation Plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) associated buffer mitigation/nutrient offset credit calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream buffer determination letter from DWR, and 8) Site Viability Letter from DWR; 9) a figure depicting the proposed stream mitigation areas; and 10) service area figure for each mitigation type proposed under this Instrument. B. The Sponsor will obtain all applicable federal, state, and local documentation, permits, or authorizations needed to construct and maintain the Bank Parcel. This Instrument as, or substitute for, such documentation, permit, or authorization. C. Any restoration activities or proposed construction within the streams, riparian buffers, and other riparian areas on the Bank Parcel to produce Riparian Buffer Credit or Nutrient Offset Credit must be approved by DWR in writing prior to implementation. The failure of the Sponsor to comply the Bank Parcel. All restoration activities must be performed in concurrence with any stream mitigation activities and not before. D. the approved Plan must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved Plan. Property Disposition & Long-Term Management for the Bank Parcel E.Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the Alamance County Register of Deeds’ office that is sufficient to ensure protection, operation and maintenance of restored riparian buffers and other riparian areas for the duration specified in the approved Plan. F. The form of the conservation easement shall be consistent with the standards employed by the State of North Carolina in the protection of restored riparian buffers and riparian areas and shall be approved by the DWR and USACE prior to the release of any credits. G. The Sponsor shall not grant additional easements, right of ways, or any other property interest in or to the project areas, without prior approval from the DWR and the USACE. H. The Sponsor agrees to transfer or assign the conservation easement and its interests in perpetuity - Revenue Code prior to the first credit release. The holder shall be a land trust or stewardship program that will hold and enforce the conservation easement and the interests in perpetuity. The Sponsor shall choose a land trust or stewardship program that is accredited by the Land Trust Accreditation Commission and/or has been approved by DWR prior to the first credit release. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. 6 I. In the event the Sponsor is also the owner of the underlying fee interest in the property, the conveyance of the conservation easement to a land trust or stewardship fund must be arranged at the outset of the approved Plan. Financial Assurances for Bank Parcel Development J.Following approval of the Plan for the Bank Parcel, the Sponsor shall provide Performance/Maintenance Bonds from a surety company that is rated no less than an “A-” as rated by A.M. Best, to construct the sites according to the approved plans. It is the Sponsor’s responsibility to confirm that the surety company is rated no less than an “A-” with each annual bond renewal. K. The amount of the Performance Bond shall be 100% of the estimated cost for implementation of the mitigation activities of the Bank Parcel as described in the approved Plan. No bond shall be less than $150,000.00 to cover construction costs. L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct the projects prior to the first credit releases. M.Once DWR has released all credits for completion of all the items listed below, then the Bank Item J and K of this section: 1. Instrument and Plan approved by DWR, Conservation Easement recorded, Financial Assurance posted; 2. All Riparian Earthwork, Planting, and Installation of Monitoring Devices Completed, performed by DWR; 3. As-Built Report as described in Section VI has been received by DWR; and 4. DWR has submitted a written approval of the As-Built Report. N. To comply with this section, DWR must be the Obligee on all performance bonds. VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL As-Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding Plan, to establish, maintain, and monitor Jordan Lake Riparian Buffers or other riparian areas until Item B (1) and (2) of Section X have been satisfied. B. Within 30 calendar days after completing the establishment of the nutrient offset areas, the Sponsor will submit written notification to DWR documenting that all nutrient offset activities have been 7 completed. Failure to submit written notification within 30 days may result in a modified credit release schedule or a delay in the issuance of credit releases. Notification shall include all the following 1.Plan; 2.Figures representing all riparian restoration, riparian enhancement and riparian preservation activities where applicable; 3.Figures representing location of all monitoring plots installed; 4.Detailed planting plan- including type of species planted, density of species planted, and any modifications to the planting plan from what was approved in the Plan; 5. Description of how the conservation easement boundaries were marked; 6. Any major changes to the conservation easement boundary or to the amount of Riparian Buffer Creditsor Nutrient Offset from what was proposed in the approved Plan. C. The Sponsor will submit an as-built Planand report for the Bank Parcel after completing the establishment of the buffer mitigation and nutrient offset areas and when all stream mitigation activities have commenced. The as-built report will describe any deviation from the approved Plan and will document the following: 1. Riparian restoration and planting details, invasive species control, confirmation of fence installation (if applicable), monitoring device locations, vegetation plot locations, photo point locations, as appropriate and confirmation that all boundary markers are installed. 2. Provide confirmation that the construction of all stream mitigation activities has been completed. 3. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory of the final areas for riparian buffer mitigation and nutrient offset . 4. As-built map of the mitigation area showing where riparian restoration, riparian enhancement and/or riparian preservation was performed and any deviations to the Bank Parcel from what was approved in the Plan. 5. As-Built map of the stream mitigation areas. 6. Aerial map of the mitigation area that was included in the approved Plan. Financial Assurance for Bank Parcel Monitoring and Maintenance D. After completion of the restoration/construction on the Bank Parcel, a Performance/Maintenance Bond will be secured for 100% of the estimated cost to implement the monitoring and maintenance plan as described in the approved Plan and As-Built Report applicable for the site. The Bond must be from a surety company that is rated no less than an “A-” as rated by A.M. Best, and it is the Sponsor’s responsibility to confirm that the surety company is rated no less than an “A-” with annual bond renewals. E. A Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all mitigation credits to the Bank Sponsor. Upon receiving a credit release 8 letter from DWR approving a monitoring report with no contingencies, the bond may be lowered for that next year’s monitoring based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000 initially, to cover monitoring and maintenance costs. F. Once DWR has released 100% of all credits for completion of all Bank Parcel milestones described in Table 3.0 of Section VIII and in the corresponding Plan, the Bank Sponsor will be released from D and E of this Section. G. To comply with this section, DWR must be the Obligee on all performance bonds. Monitoring and Maintenance Reports H. The Sponsor shall monitor the Bank Parcel as described in the Plan until such time as DWR determines that the performance standards described below have been met. The monitoring period shall be a minimum of five consecutive years. I. Performance Standards for Vegetation: Native hardwood trees or native hardwood tree and shrub species should be Planted at a density sufficient to provide 260 stems per acre after five years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species must be Planted. No one species shall be greater than 50% of the Planted stems. A list of species for Planting will be detailed in the Planfor approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. J.A “stem” means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in heightand shall apply, on the Bank Parcel, to the minimum height that a planted tree or shrub shall be at included in the annual vegetation data included with the monitoring reports. K. If the performance standards of the vegetation are not met, supplemental Plantings may be Supplemental Plan and maintained for five years. Bank Parcel maintenance, such as ensuring diffuse flow, managing invasive species, and pest control will be included in the Plan. L.Monitoring Reports for Riparian Buffer Credit or Nutrient Offset Credit: Reporting criteria of the vegetation shall be based on the Carolina Vegetation Survey (CVS) – EEP Protocol for Recording Vegetation Level 2 Plot Sampling only version 4.0 or any updated versions of this protocol in place on the date of acceptance of the Plan. The Sponsor shall submit to the DWR an annual monitoring report no later than December 31 of each year for a minimum of five consecutive years after the first full growing season. Vegetation data shall not be collected prior to late August of each year.This report willdescribe the conditions of the Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved Plan. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative with supporting photos summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; and 9 3. A map, survey, or other figure showing locations of sampling plots, permanent photo points, location of transects, etc.; and 4. Monitoring data, including specific vegetative counts showing that the trees or tree and shrub species Planted are meeting performance standards and updated photographs; and 5. A copy of the most recent Bank credit/debit ledgers; and 6. Corresponding verification letters from designated local governments ; and 7. Corresponding Mitigation Transfer Certificates ; and 8. Proof of performance bond renewal to cover the next monitoring year (if applicable) Contingency Plans/Remedial Actions M.In the event the Bank Parcel fails to achieve the performance criteria described in this Instrument and the approved Plan, the Bank Sponsor shall develop necessary contingency plans in coordination with the DWR and implement appropriate remedial actions for the Bank Parcel and the Bankthe DWR may modify the monitoring period. VII. CALCULATION OF CREDITS FOR THE BANK PARCEL Riparian Buffer Credits A. All Riparian Buffer Credits shall be determined based on the ratios and percentages provided in 15A NCAC 02B .0295(m) and (n) following the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits letter issued by the DWR, see reference # 4, including the most recent Project Credit Table Template provided online. B. Riparian buffer restoration on the Bank Parcel, as described in 15A NCAC 02B .0295(n) and (o)(3) and defined in 15A NCAC 02B .0295(b) may be used for Riparian Buffer Credit. Some riparian restoration areas may also be used for Nutrient Offset Credit as indicated in the Site Viability Letter. C. Riparian buffer preservation on the Bank Parcel, as described in 15A NCAC 02B .0295 (o) and defined in 15A NCAC 02B .0295 (b), can only be used for Riparian Buffer Credit. D. Riparian Buffer Credit is defined as one (1) buffer credits per one acre. Nutrient Offset Credits E.submitted under this Instrument will be determined by applying the applicable ratio as provided in 15A NCAC 02B .0295(m) for a Restoration Site following the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits issued by the DWR, including the most recent Project Credit Table Template provided online by DWR, see reference # 4. All riparian areas proposed for Nutrient Offset Credits must be a minimum of 50 feet from the top of the stream or ditch banks on land noted in a Site Viability Letter as agriculture. 10 F. Nutrient Offset Credits cannot be achieved through the preservation activities performed on this Bank Parcel. G. Nutrient Abatement of Restored Riparian Area/Buffers within landuse determined to be agriculture: The Sponsor and DWR agree to the following: a. Pursuant to the Jordan Trading Rule Item 15A NCAC 02B .0273(2)(a), load reductions eligible for credit are only those that exceed reduction needs calculated by applying the strategy subwatershed percentage reduction goals as provided in 15A NCAC 02B .0262(5). per acre for restored riparian buffers when compared with the credit given in other river basins. Table 3.0 below lists the generated credit per acre of restored riparian buffer for the Haw River Subwatershed. Table 3.0. Generated credit yields for forest buffer restoration in Haw River Subwatershed Credit Generated (lbs/30 yrs/ac) Jordan Subwatershed Nitrogen Phosphorus Haw River 1,799.488 104.981 H. 15A NCAC 02B .0703, the party seeking to sell credit must account for differences in instream nutrient losses between the location of the reduction need and excess loading reduction being delivered to the affected area of Jordan Lake. Attachment B produced the delivered Jordan Lake Total Nitrogen (TN) and Jorden Lake Total Phosphorus (TP) credit yields per acre of buffer restoration by each Jordan Lake 14-digit HUC subwatershed. a. Delivered credits are calculated by applying the delivery factors in Table 4.0 below and the acreage of riparian restoration to the generated credit yields from Table 3.0 above. The delivery factors for the Bank Parcel under this Instrument for Total Nitrogen (TN) and Total Phosphorus (TP) are provided in Table 4.0 below using Attachment B for reference. The amount of delivered credits for each Bank Parcel will be detailed in the Plan for the Bank Parcel. Table 4.0 – Delivery Factors 1 Delivery Factors & Credit Conversion Ratio Bank Parcel TN TP Tobacco Road80% 73% 24.20689 414.93105 feet/pound 1 Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits letter issued by the DWR in November 2019 b. The Bank Sponsor shall report the pounds of nitrogen and phosphorus credit per acre of restored riparian buffer in the Bank Parcel’s Plan for both credits generated at the site of the nutrient reduction activity and the credit delivered to Jordan Lake. 11 I. The Sponsor and DWR agree the methodology and calculations for determining nitrogen and phosphorus reduction, associated with restoration of riparian areas as described in Section IV of this Instrument, shall be fixed as part of the approval of this Instrument, with the fixed amount not changing during the Plan review or credit release schedule for the bank parcel. For further details on the approved method and calculations for determining nutrient reductions associated with the riparian restoration on this Bank Parcel refer to the NCDWR - Methodology & Calculations for Nutrient Reductions document found in reference # 5. 12 VIII.CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor DWR, it is agreed that the mitigation credits associated with the Bank Parcel will become available for sale to a third party in accordance with the Credit Release Schedule below in Table 5.0. Table 5.0 -Credit Release Schedule for Riparian Buffer Creditsand Nutrient Offset Credits % Credit TaskProject Milestone Available for sale Instrument and Buffer Plan Approved by DWR, Draft Stream 25 Mitigation Plan Approved by IRT, Conservation Easement Recorded and Assigned according to Item B (1) of Section X in this Instrument 1 has been completed and approved by DWR.* and Financial Assurance Posted All Riparian Earthwork, Planting and Installation of 20 Monitoring Devices Completed, Easement Boundaries are 2 , and all applicable permits obtained. A site visit by DWR is forthis task. Monitoring Financial Assurance Posted and Approval of As-Built 10 3 Report 10 Monitoring Report #1: Approved by the DWR** & financial assurance 4 renewed Monitoring Report #2: Approved by the DWR** & financial assurance 10 5 renewed Monitoring Report #3: Approved by the DWR** & financial assurance 10 6 renewed Monitoring Report #4: Approved by the DWR** & financial assurance 5 7 renewed 10 Monitoring Report #5: Approved by the DWR** and final site visit by DWR has been conducted 8 Total 100% * For specification, please see Section VIII in this Instrument ** DWR Approval provided upon a determination that the site is meeting performance standards contained within the approved Plan B.DWRmaymodify the credit release schedulesbased on the informationsubmitted orthe order in which is received. DWR will notify the Sponsor of any modification to the credit release schedule. C.DWR may consider a Credit Release Schedule for a Bank Parcel based on the extent of change between current onsite conditions and proposed post construction conditions. D. The Sponsor must initiate implementation of the approved Plan for the site under this Instrument in concurrence with all stream mitigation activities proposed in the approved Stream Mitigation Planreferenced in Item D of Section IV of this Instrument. IX. PROCEDURE FOR DEBITING AND CREDITING 13 Credit Ledgers A. The Bank Sponsor shall maintain a credit ledger for each mitigation type for the bank parcel under this Instrument: The credit ledger shall provide the accounting for Riparian Buffer Credit feet and acres feet. B. Each credit ledger shall be submitted on a separate 8 ½ inch by 11-inch spreadsheet with legible font style and font size. The ledger shall be submitted using the templates provided in Attachment C of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Riparian Buffer Credits generated on this Bank Parcel will be used to provide mitigation for authorized buffer impacts within the Haw River Subwatershed of the Jordan Lake Watershed according to 15A NCAC 02B .0295(g). D. Nutrient Offset Credits generated on this Bank Parcel will be used to offset nitrogen and phosphorus nutrient loads within the Haw River Subwatershed of the Jordan Lake, in accordance with 15A NCAC 02B .0703. E.Available Riparian Buffer Credits (credits that have been released by DWR but not sold by the Sponsor) that are generated from riparian restoration on land designated as agriculture and meet criteria for nutrient offset credits as outlined in Section VII of this Instrument, the Site Viability Letter, and the corresponding Plan can be converted from Riparian Buffer Credits to Nutrient Offset Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. F. Available Nutrient Offset Credits (credits that have been released by DWR but not sold by the Sponsor) that are generated from riparian restoration within 0-100' from tops of banks and meet criteria for riparian buffer credits as outlined in Section VII of this Instrument, the Site Viability Letter, 15A NCAC 02B. 0295 and the corresponding Plan can be converted from Nutrient Offset Credits to Riparian Buffer Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. G. Riparian Buffer Preservation credits generated on this Bank Parcel are not transferrable into Nutrient Offset Credits. H. Credit conversions must be calculated using the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits letter issued by the DWR, see reference # 5. I. the delegated local government in the Haw River Subwatershed of the Jordan Lake Watershed or DWR prior to debiting Riparian Buffer Credits from the individual Bank Parcel. 14 J.The Bank Sponsor shall obtain verification of nutrient offset need from a designated local government in the Haw River Subwatershed of the Jordan Lake Watershed or DWR, prior to debiting Nutrient Offset Credits from the Bank Parcel. K. All credit and debit transactions for the bank parcel under this Instrument shall be accurately depicted in the credit ledgers. The Bank Sponsor shall provide DWR up-to-date credit ledgers for th the Bank by the tenth (10 hard copy of updated credit ledgers along with the corresponding Mitigation Credit Transfer Certificates and all corresponding letters from the designated or delegated local governments or DWR where applicable once a year. Notification of all credit sales shall be provided to DWR until all credits that have been released have been sold. Mitigation Credit Transfer Certificates L.All credit sales will include a Mitigation Credit Transfer Certificate(“Certificate”) that to be provided to the buyer of Riparian Buffer Credits and/or Nutrient Offset Credits, that will include, at a minimum, the following information: 1. Bank Details: (1) Bank Sponsor Name, (2) Bank Parcel as it appears in this Instrument, (3) DWR project number for the Plan as it appears in Table 1.0. 2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3 – when applicable) amount of nitrogen credits purchased in pounds and confirmation from the designated local gover4 – when applicable) amount of phosphorus credits purchased in pounds and confirmation from the designated local – when applicable) amount of Riparian Buffer Credits DWR or the local government 3. Permitted Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 14-digit HUC, (3) the subwatershed within the Jordan Lake Watershed, (4-when applicable) nutrient strategy applicable to the project, (5 – when applicable) designated Nutrient Offset Credits, and/or (6) DWR or Riparian Buffer Credits for this project. M. If the DWR determines that the Bank is operating at a deficit (e.g. the Sponsor is closing on sales and/or transferring credit that is not available), or the Bank is selling credits out of compliance with statutes, rules or this Agreement, the sale/transfer of credits will immediately cease, and the DWR, in consultation with the Sponsor, will determine what remedial actions are necessary. X. BANK PARCEL CLOSURE A. Bank Parcel Closure shall be identified as the event when the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there are no Riparian Buffer Credits or Nutrient Offset Credits left to sell. 15 B. Bank Parcel Closure shall commence only after all of the following events have occurred: 1. Transfer or assign the conservation easement and all of its interests, in perpetuity, to a land trust or stewardship program as described in Section V of this Instrument. 2. All five years of monitoring completed, and all monitoring reports submitted and approved by DWR. 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. XI. GENERAL PROVISIONS FOR THE BANK PARCEL A. Upon the presentation of proper credentials, and during normal business hours, the Sponsor and the landowner shall grant permission to the Director of DWR, or authorized representative of the Director of DWR, to enter the property containing the Bank Parcel. B. Amendments: This Banking Instrument may be amended or modified only with written approval of all signatory parties, including the USACE if it is applicable to the amendment. C. Any transfer of the Sponsor’s rights or obligations outlined in this Instrument or any other agreement referenced in this Instrument to a third party must be approved by DWR prior to the transfer. D. Force Majeure: After 100% of all of the credits have been released according to the credit release schedule in Section VIII and confirmation has been received by the DWR that the Conservation Easement has been successfully assigned in compliance with Item H of Section V, the Sponsor will not be responsible for Bank failure that is attributed to natural catastrophes including but not limited to flood, drought, disease, regional pest infestation, etc. that are beyond the control of the Sponsor. E.However, if an event occurs before 100% of all of the credits have been released according to the credit release schedule in Section VIII, then the Sponsor shall take remedial action to restore the property ate mitigation to cover credits that were sold prior to the occurrence of the event. Such remedial action shall be taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and the Sponsor. DWR must concur in writing that a force majeure event has occurred for this provision to apply. F. Oversight:Actions taken by DWR may include, but are not limited to, the following: 1. Site visits, 2. Issuance of Site Viability Letters, 3. Plan review and approval of items listed in Section V of this Instrument, 4. As-Built Report review, and approval of items listed in Section VI of this Instrument, 5. Monitoring Report review, and approval of items listed in Section VI of this Instrument, 16 6. Credit Ledger review and approval of items listed in Section IX of this Instrument, 7. Certificate review of items listed in Section IX of this Instrument and cross analysis to credit ledgers and, 8. Reports, ledgers, files and other information shall be made available to DWR otherwise specified in this or any other document. G. Validity of the Banking Instrument: This Instrument will become valid on the date of the last party’s signature. H. Specific Language of Banking Instrument Shall Be Controlling: To the extent that specific language in this document changes, modifies, or deletes terms and conditions contained in those documents that are incorporated into the Instrument by reference, and that are not legally binding, the specific language within the Instrument shall be controlling. I. Any disputes over decisions regarding this Instrument, shall be referred to the Director of DWR for a decision. The Director’s decision is subject to review as provided in Articles 3 and 4 of G.S. 150B. J. This Agreement shall be binding upon the parties and is entered into knowingly, intelligently, and voluntarily. K. Notices: A by any party to the other shall be in writing and shall be deemed to have been properly given and received on the date delivered in person or deposited in the United States mail, registered or certified, electronic mail, out below, or at such other addresses as specified by written notice delivered in accordance herewith. If to Bank Sponsor: Environmental Banc & Exchange, LLC Attention: Mr. Brad Breslow 3600 Glenwood Ave. Suite 100 Raleigh, North Carolina 27612 Brad Breslow bbreslow@res.us If to DWR: NC Division of Water Resources – 401 & Buffer Permitting Branch Attn: Nutrient Offset and Buffer Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 17 L.Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. ENVIRONMENTAL BANC &EXCHANGE, LLC By:Brad Breslow(Print) (Signature) RegulatoryManager Title: Date: NORTH CAROLINA DEPARTMENTOF ENVIRONMENT-DIVISION OF WATER RESOURCES By:(Print) (Signature) Title:Director, Division of Water Resources Date: 18